Banco do Brasil May Raise $6 Billion With Insurance IPO

Banco do Brasil SA has climbed 29 percent since Nov. 26, when it announced plans for the unit’s IPO, compared with a decline of 4.7 percent for the benchmark Bovespa index. Photographer: Adriano Machado/Bloomberg

April 3 (Bloomberg) -- Banco do Brasil SA, Latin America’s
biggest lender by assets, may raise as much as 12.2 billion
reais ($6 billion) in an initial public offering for its
insurance unit that would be the region’s largest since 2009.

BB Seguridade Participacoes SA plans to sell as much as 675
million of its existing voting shares, according to a statement
published today in the Folha de S.Paulo newspaper. The Brasilia-based company estimates the price will be 15 reais to 18 reais.

The IPO would be the largest in Latin America since July
2009, when Banco Santander Brasil SA, the local unit of Spain’s
largest bank, raised $7.5 billion, according to data compiled by
Bloomberg. Banco do Brasil and four other Brazilian companies
have announced IPO plans after Linx SA, a communications
technology provider, completed the country’s first initial
offering in nine months in February.

“BB Seguridade’s IPO will give even more capital room to
Banco do Brasil,” the bank’s chief executive officer, Aldemir
Bendine, 49, said in an interview in Brasilia today. He said the
bank may make acquisitions in the U.S. and Latin America.

Banco do Brasil is one of the top candidates to buy City
National Bank of Florida’s 26 branches from Spanish lender
Bankia SA, according to four people with knowledge of the
matter. Final bids are due in three to four weeks, said the
people, who asked not be identified because the negotiations are
private. Bendine declined to comment today on the talks. A
Bankia spokesman also declined to comment.

Banco do Brasil declined 2.2 percent to 27.05 reais at the
close of trading in Sao Paulo, compared with a gain of 1.2
percent for the benchmark Bovespa index. The stockclimbed 24
percent since Nov. 26, when it announced plans for the unit’s
IPO, through yesterday.

BB Seguridade plans to price the shares on April 23 and
start trading on the Sao Paulo exchange two days later,
according to the statement. Banco do Brasil’s investment-banking
unit is managing the offering. BB Seguridade controls all Banco
do Brasil’s insurance business, including joint ventures with
Madrid-based Mapfre SA.